Ford Motor Co. will make a new 3.7-liter V-6 engine for the popular Mustang sports car at Cleveland Engine Plant No. 1 in Brook Park next year, replacing an engine built in Germany.

The new engine, similar to one built in Lima for use in the Lincoln MKS luxury car, should go into production next year to be ready for 2011 Mustang production, said Mark Payne, vice president of the United Auto Workers Local 1250 in Brook Park.

Ford says the new engine will be more fuel-efficient and more powerful than the 4-liter V-6 it replaces. That engine, built in Cologne, Germany, produces 210 horsepower and gets 26 mpg on the highway. The upcoming 3.7-liter engine produces 305 horsepower and should get up to 30 mpg on the highway. Those power numbers are only a little bit shy of the 4.6-liter V-8 now offered in the Mustang.

“Mustang is completely transformed with this new engine,” Ford product development chief Derrick Kuzak said in a news release. “Everything people love about the car is still there, and now under the hood is a V-6 engine that uses premium technology to deliver the power, the feel, the fuel efficiency, even the sound of the best sports coupes in the world.”

Ford will showcase the 2011 Mustang this week at the Los Angeles Auto Show.

Looks like the old rivalry between the Mustang and Camaro is back in full swing with the Camaro beating the Mustang for 5 straight months. We’ll check back next summer to see what the battle looks like! The real winners here are the consumers with a choice between 2 fabulous rides!

The Camaro outsold the Mustang by more than 3,000 last month — the fifth month in a row that Chevy outsold Ford since bringing back the storied car this spring.

The battle between the two cars has been raging since the original Camaro went on sale in 1966 as a rival to the Mustang, which had launched two years earlier.

GM officials say the Camaro might even outsell the Mustang this year, which would be the first time it topped the Mustang since 1985. Through October, GM has sold 47,233 Camaros — 9,236 shy of the Mustang.

The Camaro “definitely could overtake Mustang as the segment leader by the end of the year,” Susan Docherty, GM’s vice president of U.S. sales, told reporters last month. She added: “We will hopefully do that with only nine months worth of sales versus 12.”